Circle this week opened the public Arc testnet to let banks and fintechs test dollar‑based fees, sub‑second finality and configurable privacy.
What is Arc testnet and how does the Circle Arc blockchain fit institutional use?
Arc is a Layer‑1 blockchain developed by Circle to host regulated financial workflows and programmable finance. The testnet has attracted participation from more than 100 institutions, including banks, asset managers and payments platforms; the initial roster named BlackRock, Visa and AWS among collaborators, according to industry coverage on CryptoNews.
Who are the named partners and what will they test?
Participants cited by media reports include global banks and custodians such as Goldman Sachs, BNY Mellon, Société Générale, Standard Chartered, State Street and Apollo Global Management. Firms will pilot tokenization, settlement flows and payments integrations to validate interoperability with existing market infrastructure.
How does Circle describe the platform?
Circle frames Arc as a neutral economic layer that links fiat‑pegged liquidity, notably USDC, with trading, custody and payments systems. Jeremy Allaire, Circle’s co‑founder and CEO, has outlined the aim to connect local markets to a global programmable finance platform in company statements and interviews.
How do stablecoin based fees and sub second finality shape the Arc testnet’s architecture? In brief,
Arc uses a fee model priced in dollars rather than a volatile native token. That design—often described as stablecoin based fees or fiat‑pegged pricing—seeks to give institutions predictable transaction costs and simpler accounting.
The network also advertises sub‑second finality, reducing settlement latency and the risk window for transfers. Together, predictable fees and fast finality address two core frictions for tokenized cash and securities settlement.
Tip: treasury and clearing teams should model intraday liquidity corridors under dollar‑denominated pricing before production roll‑outs.
Can configurable privacy support onchain payments infrastructure?
Arc offers configurable privacy controls that let participants restrict metadata disclosure while anchoring transactions on the shared ledger. This approach aims to reconcile public auditability with the confidentiality required by banks and merchants for commercial and regulatory reasons.
Configurable privacy is not the same as anonymity; the feature is built for regulated use cases where counterparties must be identifiable to authorized parties. For payment networks, the mechanism could permit selective disclosure of settlement details to counterparties, regulators and auditors.
Which use cases — tokenized asset settlement and more — make Arc relevant?
Circle highlights two anchor use cases: on‑chain payments infrastructure and tokenized asset settlement. Both require low‑latency finality, predictable costs and controlled data sharing, which Arc’s design targets.
How could tokenized asset settlement change post‑trade processing?
Tokenized settlement places digital claims and the cash leg on the same ledger to compress post‑trade cycles and reduce settlement risk. Early institutional pilots will measure reconciliation friction and custody adaptations needed to support token workflows.
How might payments networks use native USDC rails?
Payments firms and merchants could use native USDC liquidity to settle transactions without traditional correspondent banking rails, lowering settlement times and some counterparty layers. Operational changes to reconciliation and custody will be required to align on‑chain records with legacy ledgers.
Policy research highlights that the choice of settlement asset—whether stablecoins, tokenized bank deposits or central bank money—affects risk profiles and oversight demands. The Bank for International Settlements has analysed tokenisation and settlement risks in a market‑infrastructure context in a recent statement.
Quick definitions: what do these technical terms mean?
Sub‑second finality: a transaction becomes irreversible in under a second, cutting settlement risk. Dollar‑based or stablecoin based fees: transaction costs priced in fiat terms (USD) to reduce volatility. Configurable privacy: selective visibility controls allowing disclosure only to authorised parties while keeping cryptographic anchors public.
CoinDesk reported on 27 October 2025 about institutional participants and testnet activity, documenting early integrations and firm statements in its coverage.